American executives lack global leadership skills

Sep 06 2013 by Brian Amble Print This Article

For all the talk about the importance of global businesses and global leadership, many North American executives reach their mid-40s without any experience whatsoever of working outside their home country - in stark contrast to their well-travelled colleagues in Europe and Asia.

According to a global survey by The Conference Board and Right Management, the message that travel broadens the mind still isn't getting through to corporate America.

The study, which quizzed senior human resources executives at more than 600 organizations, found that North American executives get fewer international assignments over the course of their careers than their counterparts in Europe or Asia and argues that this insularity is harming global leadership development among US and Canadian organizations.

"The significant finding is not so much that North Americans lag when it comes to overseas experience, but that such assignments play such a minor role in preparing Canadian and US executives for global leadership," said Ric Roi, Head of the Global Center of Excellence for Talent Management at Right Management.

"In fact, the disparity among development priorities is striking. North American respondents seem to concede that international postings play a relatively minor role in their global leadership development programs."

As far as the European HR executives surveyed were concerned, international assignments topped the list of approaches that have had the greatest impact on accelerating leadership development in their organizations. For Asian executives, it was the second most important factor. But for North Americans, it was second from bottom, being seen as important by only 15 per cent of HR executives.

"Most organizations today are affected by global trends, even those without a presence in other regions or countries," said Rebecca Lea Ray, The Conference Board's Senior Vice President of Human Capital.

"Globalization has been unremitting in terms of markets, competition, suppliers and partnerships, so it is essential for organizations to have leaders who are up to the challenges of working within diverse cultures, commercial models, mobile workforces and customer preferences."

While the research focusses on leadership development, its findings highlight an even more important issue. Because while American companies often have the biggest global presence and derive large proportions of their revenues from outside their own borders, not only do their executives lack international experience, but their boards are also far more monocultural than their European counterparts because so few of board members are non-American.

In fact, roughly half of US public companies have no non-Americans on their boards at all and only around five percent of the board members of the largest 50 companies in the Fortune 500 are non-Americans. In contrast, a quarter of board members in Europe's largest company boardrooms, on average, are from cultures other than the company's home country.

So while they might make great play of gender and racial diversity, this 'executive insularity' makes it hard not to avoid the conclusion that many American boards are simply not aligned with their strategies.

As Ric Roi pointed out, international assignments provide a practical way to introduce up-and-coming managers to the demands and intricacies of global business and are vital in developing an internationally-experienced leadership pipeline.

"They learn to navigate unfamiliar settings, cultures and politics to meet their objectives. It's really action learning on an international scale," he said.

So the reluctance in North America to putting resources into international assignments is of real deep concern.

"It astonishes me that so many smart executives reach their mid-40s without having overseas experience. Nothing can take the place of managing in situ in a region, culture and work setting that is completely foreign. This is how global leadership skills are forged, skills that are desperately needed by US and Canadian companies in the years ahead," Roi added.